Tuesday 2 March 2021
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todayonline - 7 days ago

Instant View: Powell testifies on Hill as rate rise fears hit Wall Street

The U.S. economic recovery remains uneven and far from complete and it will be some time before the Federal Reserve considers changing policies it adopted to help the country back to full employment, Fed Chair Jerome Powell said on Tuesday. Powell began is testimony before the Senate Banking Committee as Wall Street looked set for its sixth straight day of declines from last week s record highs, although losses were pared after the release of his comments. Fears about rising U.S. Treasury yields hit the tech sector particularly hard. The U.S. central bank s interest rate cuts and purchases of $120 billion in monthly government bonds have materially eased financial conditions and are providing substantial support to the economy, Powell said in prepared remarks. Story: MARKET REACTION: STOCKS: The S P 500 pared losses and was last off 0.068%; The tech-heavy Nasdaq was off 1.5% BONDS: The 10-year U.S. Treasury note yield slipped to 1.3551%; 2s were flat at 0.1109% FOREX: The U.S. dollar index pared gains was up about 0.01% COMMENTS: MATTHEW KEATOR, MANAGING PARTNER, THE KEATOR GROUP, LENOX, MASSACHUSETTS “If you look back at (Powell’s) initial tenure, there was some ambiguity as to whether the Fed stood. But over the last year, in response to the pandemic, he’s done an excellent job communicating their commitment to stable markets and full employment. There may come a time when the Fed gets concerned about (inflation) but if you look at their past comments they’re hoping for some level of inflation. The policy shift to an average inflation target gives them flexibility which will allow them to see if it’s transitory or sustainable.” (Compiled by Alden Bentley and the global Finance Markets Breaking News team) REUTERS


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